A lady bird deed and a living trust both let your home pass to your heirs without probate, and you keep control of the home while you are alive. The difference is scope. A lady bird deed handles one piece of real estate and costs less. A trust can hold your home, accounts and other assets, and it can set rules for how heirs use them. This guide explains how each works in Michigan, what each costs, how each affects Medicaid, and how to choose.
TL;DR
- A lady bird deed (also called an enhanced life estate deed) moves one property to named beneficiaries at your death, outside probate. You can still sell, mortgage or change the beneficiary while you live.
- A living trust covers more than real estate. It can manage assets if you become incapacitated and can set conditions for heirs, but it generally costs more to set up: $1,500 to $5,000 versus $300 to $600 for a deed, according to one Michigan attorney.
- Michigan has no statutory transfer on death deed, so the lady bird deed is the usual low-cost way to avoid probate on a home.
- A deed is a poor fit for minor children, beneficiaries with special needs, business property or heirs who may fight. A trust is usually the better tool there.
- Many families use both. Talk to a Michigan estate planning attorney before you record anything.
Table of Contents
- What a lady bird deed does
- What a living trust does
- Lady bird deed vs. trust: side by side
- Cost and effort
- Medicaid and estate recovery
- Where a lady bird deed falls short
- Where a trust is more than you need
- Lady bird deed vs. will, and vs. transfer on death
- Using both together
- Our perspective at StoneBridge
- If your heirs end up selling the house
- How to decide: a short checklist
- FAQ
- Sources
What a lady bird deed does
A lady bird deed is a recorded deed. It names who receives the property when you die, and it reserves your right to keep full control until then. You live in the home, rent it, refinance it or sell it. The people you name do not have to sign or consent to any of that.
Because nothing passes until your death, the named beneficiaries (the remainder beneficiaries) have no rights to the home while you are alive. Michigan does not have a statutory transfer on death deed, so families use the lady bird deed to pass a home at death without probate. The American Bar Association notes that a handful of states, mainly in the South, allow enhanced life estate deeds, and the name has a broader reach than the states that commonly use it. Michigan is one of the states where it is in regular use.
Most of the top search results for this topic come from Florida, Texas and other states. The core idea is the same everywhere, but details on taxes, recording and Medicaid differ by state. This article is about Michigan.
What a living trust does
A revocable living trust is a legal arrangement that holds assets under your name as trustee while you are alive. You name a successor trustee to step in if you become incapacitated or die. Assets in the trust pass to your beneficiaries without probate, you can amend or revoke the trust during your lifetime, and the terms stay out of public court records.
To work as intended, the trust has to be funded. That means retitling the home into the trust by deed, and retitling or re-designating bank, brokerage and other accounts. A trust that is signed but never funded does little for the assets left outside it.
Lady bird deed vs. trust: side by side
| Feature | Lady bird deed | Revocable living trust |
|---|---|---|
| What it covers | One named piece of real estate | Real estate, accounts and other assets you transfer in |
| Avoids probate | Yes, for that property | Yes, for assets held in the trust |
| Control while you live | Full | Full, as trustee |
| Incapacity planning | None | Successor trustee can manage assets |
| Instructions for heirs | None | Can set conditions, timing and upkeep rules |
| Typical Michigan attorney cost | $300 to $600 | $1,500 to $5,000 |
| Privacy | Deed is a public record | Terms stay private |
| Upkeep | Record one deed | Fund the trust and keep it current |
The cost figures are one Michigan attorney's published ranges, dated 2023. Your quote will depend on your situation and your lawyer.
Cost and effort
For a single-asset plan, the gap is large. A Michigan estate planning attorney reports that drafting and recording a lady bird deed usually costs between $300 and $600, while a trust typically runs from $1,500 to $5,000. If your home is your main asset and your heirs are adults who get along, the deed gets you what you need for a fraction of the price.
The trust costs more because it does more. It is a full plan: it names a successor trustee, directs how every asset is handled and can include rules the deed cannot. If you have several assets, several beneficiaries or a complicated family, the extra cost often buys real protection.
Medicaid and estate recovery
Many Michigan families ask about this one most. A lady bird deed is often used with long-term care planning in mind.
- Estate recovery. Michigan's Medicaid estate recovery reaches only assets that pass through probate. A home transferred by a valid lady bird deed passes outside probate, so it generally falls outside those claims.
- Eligibility. According to the same source, as of 2026 creating a lady bird deed is not treated as a divestment, and the home stays an exempt asset during your life as long as your equity is at or below $752,000.
- A caution. If you hold a long-term care partnership insurance policy, Michigan law may define your estate more broadly to include life estates, which could make the home reachable. If that applies to you, get advice before you record a deed.
A trust can also keep assets out of probate and so out of estate recovery, but Medicaid rules for trusts are more technical. Whether a trust helps or hurts eligibility depends on how it is written and when it is funded. Medicaid planning is a question for an elder law attorney, not a form.
Where a lady bird deed falls short
The deed is simple, and that is both its strength and its limit. These are the situations where attorneys most often point to a trust.
A beneficiary dies before you
If a named beneficiary dies before you, their interest can pass into their own probate estate. That can disinherit the people you meant to benefit or require court action to clear title. The fix is to update the deed after any family change, and to name contingent beneficiaries when your attorney advises it.
Minor children or special needs
A deed gives the home outright when you die. It cannot hold the property for a child who is too young to manage it. Experts also advise that a deed is often not enough for minor children, beneficiaries with special needs or complicated family dynamics. A trust can hold and manage the home for them. If you have a child with a disability who receives public benefits, speak with an attorney who handles special needs planning before you leave property directly.
No management instructions for heirs
A trust can say who pays for repairs and taxes, and can give heirs a right of first refusal. A deed says none of this. Heirs who disagree about selling or maintaining the home may end up in a court partition action. If you have three children and one lives in another state, think about how that conversation would go.
Business or commercial property
A lady bird deed can be a poor choice for commercial or business property, because it lacks the tax and administrative protections a trust or business entity can offer. If you own a rental building through an LLC or hold several properties, ask your attorney how the deed fits with that structure.
No plan for incapacity
If you cannot manage your affairs, a deed does not give anyone authority to handle the home. A trust with a successor trustee does. A durable power of attorney can fill part of that gap.
Where a trust is more than you need
A trust is not automatically better. If you are a widow or widower with one home, no other significant assets, and two adult children who want to share it, a trust may be more cost and paperwork than the situation calls for. The deed gets the home to them without probate. Pay attention to how the home is titled and what you want to happen if one child dies first, and the deed may be all you need.
The scope point holds across states. As one law firm puts it in a Florida comparison, the choice turns on how many assets have to move, not on which instrument is stronger.
Lady bird deed vs. will, and vs. transfer on death
Two other searches come up often.
Versus a will. A will takes effect only at death and generally has to go through probate before the home reaches your heirs. A lady bird deed moves the home outside that process. A will still has a job: it can cover property the deed does not, name a guardian for minor children and direct personal belongings. Many people have a will, a deed and a power of attorney together.
Versus a transfer on death deed. In states with a TOD deed, the owner names a beneficiary and keeps control, much like a lady bird deed. Michigan has no such statute, so the lady bird deed is the practical Michigan equivalent. If you read an article about TOD deeds from Texas or another state, do not assume it applies to a Michigan home.
Using both together
It is common to hold most assets in a trust and use a deed for a specific property, or to put the home into the trust and keep a deed for another parcel. Combining them can make sense, but it has to be coordinated. A deed that conflicts with the trust can create confusion about who actually gets the home. If you already have a trust, ask your attorney whether the home is titled in it before adding a deed.
Our perspective at StoneBridge
We buy houses across Michigan, and many of our conversations begin after a death. We see what happens when the paperwork was thin or out of date, and we see what happens when it was done well.
What we notice is that the outcome rarely depends on which instrument the owner picked. It depends on whether the family still agrees on what to do with the home. A heir who lives in Arizona, a house that needs repairs nobody wants to pay for, and three siblings who disagree about price: that is where inherited homes get stuck, whether the transfer happened by deed, trust or probate.
So our advice is practical. Choose the tool that fits your assets and your family, update it after any life change, and think about what happens to the house after you are gone. Heirs sometimes decide they would rather sell than keep it. A home in poor condition, with deferred repairs or storm or fire damage, can be hard to list. We buy homes as-is, so heirs do not need to fund repairs or hold a public listing.
We are not attorneys and we do not give legal advice. Decisions about deeds, trusts and Medicaid belong with a Michigan estate planning or elder law attorney.
— StoneBridge
If your heirs end up selling the house
A deed or trust settles who owns the home. It does not settle what the owner does with it. If you or your family inherit a Michigan home and would rather not renovate, list or manage it, we can make a direct, private offer on the property in its current condition. You do not need to make repairs, and there is no commitment until you agree to an offer.
- Inherited property: Sell an inherited house in Michigan
- Condition issues: Sell your house as-is
- Other situations: Michigan home selling options
How to decide: a short checklist
Work through these questions, then bring the answers to an attorney.
- List what you own. If the home is nearly everything, a deed is a candidate. If you have several accounts, properties or a business, lean toward a trust.
- Think about your heirs. Adults who get along suit a deed. Minors, a beneficiary with special needs, a second marriage or a family conflict favor a trust.
- Consider long-term care. If Medicaid is a realistic possibility, ask an elder law attorney how a deed or trust interacts with eligibility and with any long-term care partnership policy.
- Plan for incapacity. If you want someone to manage your property if you cannot, add a trust or at least a durable power of attorney.
- Check the budget. Compare $300 to $600 for a deed with $1,500 to $5,000 for a trust, using local quotes.
- Set a review date. After a death, birth, divorce or move, revisit the documents.
FAQ
Is it better to have a lady bird deed or a trust?
It depends on what you own and who inherits. A deed is cheaper and works well for a single home passing to adult children. A trust fits better with multiple assets, minor or vulnerable beneficiaries, or a need for incapacity planning.
What is the downside to a lady bird deed?
It covers only one property and gives heirs no instructions. If a named beneficiary dies before you, their share can pass into their own estate, and the deed does not help if you become incapacitated. It is also a public record.
Can Medicaid take my house if I have a lady bird deed in Michigan?
Generally no. Michigan's estate recovery program reaches only probate assets, and a valid deed passes the home outside probate. The exception to check is a long-term care partnership policy. Ask an elder law attorney about your own facts.
Can I sell my home if I have a lady bird deed?
Yes. You keep full ownership while you are alive, so you can sell, mortgage or revoke the deed without the beneficiary's consent. If you sell, the deed no longer applies to that property.
Sources
- Attorney Advice on Lady Bird Deeds for Michigan Estate Planning, Brandon S. Dornbusch, PLC
- Michigan Medicaid Estate Recovery 2026, Brevy Care
- Michigan TOD Deed? Lady Bird Deed vs. Living Trust (2026), Family Estate Guide
- Selling Inherited Property in Michigan (2026 Guide), Inherited Property Match
- Uniform Laws Update: The Uniform Real Property Transfer on Death Act, American Bar Association
- Lady Bird Deed vs Living Trust in Florida: Which Is Better?, Jose Lorenzo Law